Waiting for rain

By Stephan Faris, Fortune

(Fortune Magazine) -- Problem: Drought relief can be fatally slow getting to stricken areas.

Solution: Weather insurance.

As an Ethiopian, Menghestab Haile knows what drought means. Farmers sell everything to buy food. When the rains return, they have no seeds and no tools. Relief doesn't show up until people are starving. The current system "doesn't respond fast enough," says Haile, a food security advisor for the United Nation's World Food Program. To change that, WFP teamed up with French insurer AXA. If rainfall in northern Ethiopia had been below a certain level this year, a $930,000 premium, funded mostly by the U.S., would have yielded $7 million, payable immediately to the WFP. This year rainfall has been abundant, so there will be no payout. In Mexico and India, where the World Bank subsidizes insurance for small farmers, weather-related coverage has expanded to more than $150 million since programs began in 2002.

FOR MORE INFO Go to wfp.org.  Top of page

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.